Inside the BCE deal

How the tiny clause spelled the end of the biggest deal - G&M


I just thought this article was really insightful. It's ironic that the solvency clause they put in to screw the bondholders came back to screw them.
So BCE's high priced lawyers were able to overturn the case in the Supreme court (no doubt with some political pressure), but they were no match for the banks who stood to lose millions issuing corp debt in this credit environment.
Judging by the 1/3 price drop, no one saw it coming; but don't feel bad for the BCE execs; I'm sure they sold short their stock and profited from the inside info.

I've felt a bit skeptical of BCE and Sabia over the past few years. While Rogers and Telus has been growing profits and market share through clean competitive business tactics like marketing and improved products and services, Sabia was trying to prop up the stock through financial engineering like turning BCE into an income trust and privatization. I think it's telling that Teachers/banks wanted Sabia gone as part of the deal going forward a few months ago. Since they've been so side tracked by this deal, BCE has lagged the competitors in the fast changing internet/wireless/cable space. I would expect the stock to lag going forward as well.